As President Donald Trump’s International Pricing Index slogs through the regulatory process, former Food and Drug Administration head Scott Gottlieb predicted Monday it will be “very hard to implement,” with drug companies likely to scheme around the controversial idea.About a year ago, Trump pitched the idea as a way to attack “global freeriding.” The proposal ties drug prices in the U.S. to foreign countries, starting with the Medicare Part B program. The Office of Budget and Management has yet to release the proposed rule despite more than 100 days of review.Gottlieb anticipated the rule will eventually come out but is skeptical it would achieve its goals, speaking at the Biopharma Congress in Washington. The former FDA chief added that companies could offer American-style rebates to Europe to keep foreign list prices equally high. “I don’t want to give too much away, because I’ll tell people how to game around this,” said Gottlieb, who now sits on Pfizer’s board of directors.
Despite a prolonged and ongoing regulatory review, Trump administration officials have reaffirmed their support for the IPI model, which has been criticized by PhRMA as importing foreign price controls.
Joe Grogan, director of the White House’s Domestic Policy Council, said Monday the administration is being “very conscious of getting policy right.” Grogan was the associate director of health programs at the Office of Management and Budget until February, when he moved over to the White House.
Grogan said lower drug prices abroad are unfair to American taxpayers, and argued the IPI model fixes that imbalance. He described a typical model for companies as parking intellectual property in Ireland, manufacturing the drug outside the U.S. and then importing it at a premium price.
While acknowledging debate around the plan’s specifics, Grogan said the broader disparity between U.S. and foreign prices is “something that needs to be addressed somehow.”
But Gottlieb was more skeptical about the idea’s eventual effectiveness. As an FDA commissioner remembered for calling the pharma industry out on its “shenanigans” and “Kabuki drug-pricing constraints,” he anticipates more schemes coming to avoid the IPI model.
In addition to bring U.S.-style rebates to Europe to keep prices high, Gottlieb said drug companies could circumnavigate the rule if it includes an exemption for biosimilar competition.
“The rule itself now carves around settings where there is a biosimilar, so you can see branded companies settling with one biosimilar manufacturer, giving them a little bit of market share and getting them out of the IPI,” he said.